Court rules governing arbitration proceedings in the Cayman
Islands have been wholly revised by virtue of the Grand Court
(Amendment No.1) Rules 2013 which take effect from 1 July
Until July 2012, the law governing arbitrations in the Cayman
Islands did not meet modern international standards and was used
primarily for resolving domestic disputes. The new
Arbitration Law (the Law), which came into force on 2 July 2012,
completely overhauled the arbitration regime and has brought it
into line with the current UNCITRAL model law.
The Cayman Islands Grand Court Rules Committee has now approved
a wholly revised suite of procedural rules (Order 73), together
with necessary amendments to existing rules for financial services
proceedings (Order 72) and service of process out of the
jurisdiction (Order 11), which will provide legal practitioners
with a comprehensive procedural code for arbitration-related court
applications and applications to enforce arbitral awards.
These rules reflect the fundamental principle of minimizing
court intervention in matters where the parties have agreed to
arbitrate. However, a balance must be struck between on the
one hand providing sufficient judicial support to arbitrations and
exercising a supervisory role (in limited, defined circumstances)
to maintain the integrity of an arbitration process; and on the
other hand enabling too much intervention so that an arbitral
process is undermined and respondents are given the opportunity to
delay, or even derail, an arbitration through satellite court
The Grand Court rules seek to strike this balance by providing a
procedural framework in which the court will secure the just,
expeditious and economical disposal of arbitration applications; by
providing for the stay of legal proceedings commenced in breach of
an arbitration agreement; and by giving procedural effect to the
Law which generally limits the court's ability to intervene in
the substantive arbitration proceedings to circumstances where the
tribunal is unavailable or incapacitated or to where all available
tribunal processes have first been exhausted.
The Grand Court rules provide that every arbitration
application, being any proceeding or application which concerns or
relates to arbitration proceedings in the Cayman Islands, will be
commenced in the Financial Services Division of the Grand Court
(the FSD). The FSD is responsible for handling the more
complex commercial cases arising out of the financial services
sector in the Cayman Islands. In consequence, arbitration
applications will be assigned to well qualified, experienced judges
who have substantial experience of resolving these kinds of
Arbitration proceedings are being increasingly recognised as an
effective alternative to court proceedings in order to resolve
commercial disputes. The Law has modernised the arbitration
regime in the Cayman Islands and will stimulate the development of
Cayman's international arbitration industry. The revised
Grand Court rules will facilitate the implementation of the Law and
will provide the necessary infrastructure for the Cayman court to
support Cayman-seat arbitrations.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The claim followed the conclusion of two years of litigation (ORD 12/0035 & ORD 12/0034) between the parties in respect of the Bank's contractual claim for amounts owed by TSEL to the Bank pursuant to certain business loans.
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